19th Oct 2012



The appellant (N) appealed against a costs order made following the trial of her claim against the respondent management company (F) for damages and specific performance in relation to a number of breaches of covenants in her lease of an apartment.

The judge ordered damages in N's favour in relation to one of the alleged breaches and accepted an undertaking by F in relation to another. He ordered that N pay 75 per cent of F's costs. The Court of Appeal allowed N's appeal against the judge's substantive order and upheld all her claims for damages except one.

N submitted that the costs order should be set aside as it was based on a decision on the merits of her claim which had been set aside by the Court of Appeal. F argued that N had recovered much less than she had originally claimed so that her costs were disproportionate to her recovery; and that her conduct could be criticised in that she had not complied with an arbitration clause, had brought her proceedings prematurely and had failed to engage in proposals for mediation or to accept reasonable offers to settle.


N had had to bring proceedings to recover what she was legally entitled to and the question of the proportionality of her costs had to be assessed on an assessment of costs and not at the instant hearing. N could not be criticised for not complying with the arbitration clause as F never sought a stay for arbitration. N had first raised the issues with F in June 2008 and, despite correspondence, the work of which she complained was not substantially addressed prior to the commencement of litigation in May 2009. It was clear that N had made offers for dates for mediation. It had not been unreasonable for N to commence proceedings at the time and in the manner she did or to have refused F's offers to settle which would have deprived her of her right to recover costs as the successful party. Following the appeal, N was substantially the overall winner of the litigation and was entitled to all the costs of her claim less a five per cent discount to reflect the one point on which she lost. N was not entitled to her costs of an expert's report on the loss of value of her property as that was not a realistic claim. An order was made under the Landlord and Tenant Act 1985 s.20C that F's costs incurred up to and including the trial were not to be regarded as relevant costs to be taken into account when determining the amount of service charge payable by N under the lease.

Appeal allowed


An order that the claimant pay 75 per cent of the defendant's costs of a trial was set aside where the Court of Appeal had since overturned the judge's substantive order and upheld most of her claims for damages.


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